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Leading source of small-business complaints revealed

Adrian Flores
Adrian Flores
02 July 2020 1 minute readShare
AFCA

The financial complaints watchdog has unveiled the most commonly cited issue from consumers over the 2019–20 financial year as it begins factoring COVID-related cases into its figures.

The Australian Financial Complaints Authority (AFCA) has found that 3,385 of the 80,546 complaints received from 1 July 2019 to 30 June 2020 related to small businesses.

The most commonly cited complaint relating to small businesses was about misleading product/service information, AFCA said.

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AFCA also revealed that 4,773 complaints related to COVID-19. Of those complaints, 1,813 (38 per cent) were about general insurance, 1,711 (36 per cent) were about credit and 791 (16 per cent) related to superannuation.

AFCA chief executive and chief ombudsman David Locke said most complaints have been about credit, insurance claims and superannuation.

 

“One in 10 complaints also related to financial difficulty where a consumer was unable to make repayments on loans due to unforeseen circumstances or over-commitment,” he said.

Mr Locke noted that complaints relating to the COVID-19 pandemic were more likely to involve financial difficulty.

He also added that he anticipates seeing more financial difficulty related COVID-19 complaints over the next six months as government support, such as JobKeeper payments, are wound back, along with the end of financial firm initiatives such as a ban on rental evictions and mortgage pausing.

However, Mr Locke said he saw less complaints relating to COVID-19 than anticipated due to the proactive response taken by financial firms.

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“Australian consumers have faced a number of significant challenges this year. The pandemic has had a particular impact on Australian households, with 20 per cent of COVID-19-related complaints being about financial hardship,” Mr Locke said.

“We commend financial institutions for their quick response to the pandemic. As always, we encourage banks and insurers to maintain open and transparent communication with their customers about the support available to them if they’re experiencing financial difficulty.”

Leading source of small-business complaints revealed
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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